Friday, April 02, 2010

Health Care Reform's Timeline

As the dust settles on the Great Health Care Reform Bill of 2010 passage in Congress, it's time to ask what we got for the effort. No matter what people thought of the bill before, like it or not, it's here.

Still, few people really understand what the bill contains and when the benefits and costs for the measure will be incurred on a year-by-year basis. Given the bill's complexity and tortuous path though Social Security and IRS tax codes, this really isn't a surprise, I suppose.

So here's my simplified broad-brush overview, broken down by year, culled from several sources referenced below:

TAX CHANGES

2010

New Tax Credit for Small Businesses: Provides a maximum credit of 35% of employers’ insurance premiums but is only available to those with fewer than 10 employees with wages under $25,000 per employee. This credit is completely phased-out for firms with more than 25 employees and wages above $50,000.

Ultra-Violet Treatment Tax: 10% tax on indoor UV treatments.

2011

Health Savings Accounts (HSAs)/Flexible Spending Accounts (FSAs): The federal government will prevent HSA and FSA patients from using their savings for over-the-counter medicine.

New Drug Tax: A new federal tax on sales of brand-name drugs for use in government health care programs.

W-2 Forms: The federal government will now require employers to disclose the full value of all benefits provided for every employee’s health insurance on the employee’s annual W-2 form.

2013

Medicare Payroll Tax: The federal government will increases the Medicare payroll tax by 0.9% to 3.8% for those with earned income above $200,000 individually or $250,000 for a couple.

New Investment Tax: The federal government will impose a new tax on investment income of 3.8% against all Americans with incomes above $200,000 individually or $250,000 for a couple.

New Medical Device Tax: The federal government will impose a new 2.3% tax on all medical devices (exempting just eyeglasses, contact lenses, hearing aids and devices they deem generally purchased by the retail public).

Higher Hospital Insurance Tax: The hospital insurance tax will increase 0.9 percentage points for those earning more than $200,000 ($250,000 for married filing jointly), and it includes net investment income.

2014

New Individual Mandate Begins: The federal government will require individuals to buy insurance or face tax penalties of up to $695 or 2.5% of income (whichever is greater).

New Employer Mandate Begins: The federal government will require that all employers with more than 50 workers who do not offer insurance or who offer coverage but their employees receive a federal insurance subsidy pay a new federal tax of up to $2,000 per employee for each employee over 30 employees.

New Insurance Subsidies Available: For individual or families above the Medicaid eligibility cutoff but below $88,200 (for a family of four) who are not offered or eligible for other insurance coverage, a tax credit is available to purchase insurance through the new government exchanges.

New Annual Tax on Health Insurance Providers: The federal government will levy a new tax on health insurance providers.

2018

New Premium Insurance Excise Tax: The federal government will impose a new 40% tax on high-quality insurance plans they define as “High-Cost”.

PRIVATE INSURANCE CHANGES

2010

Dependent Coverage: Insurers are required to cover children up to age 26 on their parents’ plan.

Senior Drug Rebate: Seniors will get a $250 rebate to help fill the "doughnut hole" in Medicare prescription drug coverage, which falls between the $2,700 initial limit and when catastrophic coverage kicks in at $6,154.

High-Risk Pool for Pre-existing Conditions: Insurers will not be able to rescind policies to avoid paying medical bills when a person becomes ill. Funding is limited and individuals may be placed on a waiting list.

Pre-existing Conditions for Children: Limited protections to preclude insurance from excluding children with pre-existing condition.

2011

CLASS Program auto-enrollment: The federal government will establish a national insurance program for long-term care. The federal government will force employers to sign up their employees for payroll deductions in 2011 unless the employee specifically waives enrollment in writing.

2012

Nonprofit insurance coops developed: Sets up program to create nonprofit insurance co-ops that would compete with commercial insurers.

Accountable Care Organizations established: Hospitals and doctors "encouraged" to band together in quality-driven "accountable care organizations." Sets up an experimental "pilot program" to test more efficient ways of paying hospitals, doctors, nursing homes and other providers who care for Medicare patients from admission through discharge. Successful "experiments" would be widely adopted.

Readmission penalties: Establishes penalizes for hospitals with high rates of preventable re-admissions by reducing Medicare payments.

2014

Health Insurance Exchanges: The federal government will require states to establish an exchange for federally-approved health insurance.

Federal Standards for Insurance: The federal government will require all insurance plans to include federally-mandated benefits and coverage levels (Bronze, Silver, Gold, and Platinum).

Guaranteed Issue and Renewability: The federal government will require insurers to offer coverage to anyone wanting a policy and every policy has to be renewed.

Pre-Existing Conditions: The federal government will mandate that insurers cannot impose any pre-existing condition exclusion.

New Individual Mandate Begins: The federal government will require all Americans to buy insurance or face taxes up to $696 or 2.5% of income (whichever is greater). There is a phase-in to the penalties: If they do not have acceptable coverage, the penalty will be $95 in 2014, $325 in 2015, and $695 (or up to 2.5 percent of income) in 2016. Families will pay half the amount for children, up to a cap of $2,250 per family. After 2016, penalties are indexed to Consumer Price Index.

New Employer Mandate Begins: The federal government will require all employers with more than 50 employees who do not offer insurance or who offer coverage but their employees receive a federal insurance subsidy to pay a penalty of up to $2,000 per employee for each employee over 30 employees.

2016

State Compacts: If the federal government approves, states would be allowed to begin a multi-state compact for insurance.

2017

Large Group Market: If the federal government approves, states may allow large group insurers to sell in the exchange.

Waiver for State Innovation: If the federal government approves, states may ask for a limited waiver from certain federal requirements.

2018

New Premium Insurance Tax: The federal government will impose a new 40% tax on high-quality insurance plans that it defines as “High-Cost”. (The so-called "Cadillac Insurance" exemption negotiated for the powerful unions remained in the bill).

5 comments:

I added a link to a video that reviews two perspectives: a cardiologist at U of I, Chicago and a local orthopedist who see's primarily the uninsured. They offer two perspectives, one more optimistic than the other.

Also a link to Kaiser Family Foundation's similar timeline published today is also provided.

One item not included in your list happens January 1, 2012....that is corporate-to-corporate 1099-MISC reporting requirements.

Simply stated, all businesses, regardless of size, will be required to track all payments made to other corporations for goods or services and report that "income" they've provided to the corporation via a 1099-MISC if payments exceed $600 to any one vendor/corporation.

This is a HUGE paperwork nightmare for any company, large or small as it requires not only tracking all payments via EIN numbers to be able to cut 1099-MISC to each payee, but the company must also track all dollars they receive in from other corporations so that they can make sure they receive all their 1099-MISC too to report to the IRS accurately. One missing 1099-MISC....well, we all know what happens when that happens to an individual independent contractor - they're assumed to be trying to under-report income.

This provision in the law is going to kill businesses since it's a huge compliance paperwork nightmare!

About Me

Westby G. Fisher, MD, FACC is a board certified internist, cardiologist, and cardiac electrophysiologist (doctor specializing in heart rhythm disorders) practicing at NorthShore University HealthSystem in Evanston, IL, USA and is a Clinical Associate Professor of Medicine at University of Chicago's Pritzker School of Medicine. He entered the blog-o-sphere in November, 2005.
DISCLAIMER: The opinions expressed in this blog are strictly the those of the author(s) and should not be construed as the opinion(s) or policy(ies) of NorthShore University HealthSystem, nor recommendations for your care or anyone else's. Please seek professional guidance instead.